Conduct of Business by the Company Pending the Merger. (a) The Company agrees that, between the date of this Agreement and the Effective Time or the earlier termination of this Agreement (the “Interim Period”), except as (1) expressly contemplated by any other provision of this Agreement or any Ancillary Agreement, (2) as set forth in Section 6.1 of the Company Disclosure Schedule, and (3) as required by applicable Law (including as may be requested or compelled by any Governmental Authority), unless Parent shall otherwise consent in writing (which consent shall not be unreasonably conditioned, withheld or delayed): (i) the Company shall conduct its business in the ordinary course of business; and (ii) the Company shall use its commercially reasonable efforts to preserve intact in all material respects the business organization of the Company, to keep available the services of the current officers and employees of the Company, and to preserve in all material respects the current relationships of the Company with customers, Suppliers and other persons with whom the Company has significant business relations. (b) By way of amplification and not limitation, except as (i) expressly contemplated by any other provision of this Agreement or any Ancillary Agreement, (ii) as set forth in Section 6.1(b) of the Company Disclosure Schedule, or (iii) as required by applicable Law (including as may be requested or compelled by any Governmental Authority), the Company shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of Parent (which consent shall not be unreasonably conditioned, withheld or delayed): (i) amend or otherwise change the Company Organizational Documents or equivalent organizational documents; (ii) issue, sell, pledge, dispose of, grant or encumber or subject to any Lien, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, or otherwise amend any terms of, (A) any shares of any class of Capital Stock, or any Company Options, Company Warrants, Company RSUs, convertible securities (including the Company Convertible Notes) or other rights of any kind to acquire any shares of such Capital Stock, or any other ownership interest (including, without limitation, any phantom interest), of the Company, provided that the exercise, settlement or vesting of any Company Awards in the ordinary course of business and issuance of securities pursuant to existing employment or similar agreements with employees, officers and directors of the Company shall not require the consent of Parent, and provided, further, that the Company shall be permitted to grant Company Awards in accordance with Section 6.1(b)(ii) of the Company Disclosure Schedule; or (B) any material assets of the Company; (iii) adopt a plan of, or otherwise enter into or effect a, complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of the Company (other than the Merger), acquire any equity interest or other interest in any other entity or enter into a joint venture, partnership, business association or other similar arrangement with any other entity; (iv) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, excluding any dividend payable in the form of shares of Capital Stock; (v) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of its capital stock, other than redemptions of equity securities from former employees upon the terms set forth in the underlying agreements governing such equity securities; (vi) (A) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or substantially all of the assets or any other business combination) any corporation, partnership, other business organization or any division thereof, in each case; or (B) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any person, or make any loans or advances, or grant any security interest in any of its assets; (vii) (A) grant any increase in the compensation or incentives payable or to become payable to any current or former director, officer, employee or service provider of the Company that has a base salary or compensation in excess of $425,000 (each, a “Company Service Provider”), (B) enter into any new, or terminate or amend any existing, employment, retention, bonus, change in control, or termination agreement with any Company Service Provider, (C) accelerate or commit to accelerate the funding, payment, or vesting of any compensation or benefits to any Company Service Provider, (D) establish or become obligated under any collective bargaining agreement or other contract or agreement with a labor union, trade union, works council, or other representative of employees, (E) hire any new employee whose individual base compensation shall exceed $250,000, provided that such new employee receives compensation and benefits that are no more favorable than those provided to similarly situated employees of the Company, (F) terminate the employment (other than for cause) of any Company Service Provider whose individual base compensation exceeds $125,000, except that notwithstanding anything herein to the contrary, the Company may (1) provide increases in salary, wages, bonuses or benefits to employees as required under the terms of any Plan in existence as of the date of this Agreement and reflected on Section 4.10 of the Company Disclosure Schedule or, for employees whose base compensation is less than $125,000, in the ordinary course of business consistent with past practice, (2) change the title of its employees in the ordinary course of business, and (3) make annual or quarterly bonus or commission payments in the ordinary course of business consistent with past practice and in accordance with the bonus or commission plans existing on the date of this Agreement; (viii) other than as required by Law or pursuant to the terms of a Plan entered into prior to the date of this Agreement and reflected on Section 4.10 of the Company Disclosure Schedule, grant any severance or termination pay to (A) any director or officer of the Company or (B) other than in the ordinary course of business consistent with past practice, any other current employee of the Company; (ix) adopt, amend or terminate any material Plan or any Employee Benefit Plan that would be a Plan if in effect as of the date hereof except (A) as may be required by applicable Law, (B) as is required in order to consummate the Transactions, or (C) in connection with health and welfare plan renewals in the ordinary course of business consistent with past practice (provided that such renewals do not materially increase the cost to the Company of providing such benefits); (x) waive the restrictive covenant obligations of any employee of the Company; (xi) materially amend or change any of the Company’s accounting policies or procedures, other than reasonable and usual amendments in the ordinary course of business or as may be required by a change in GAAP; (xii) materially amend, or modify or consent to the termination (excluding any expiration in accordance with its terms) of any Material Contract or amend, waive, modify or consent to the termination (excluding any expiration in accordance with its terms) of the Company’s material rights thereunder, in each case in a manner that is adverse to the Company, taken as a whole, except in the ordinary course of business; (xiii) fail to use reasonable efforts to prosecute, protect, enforce and maintain, material Company IP; (xiv) (A) acquire, license, sublicense, waive, covenant not to assert, pledge, sell, transfer, assign or otherwise dispose of, divest or spin-off, any material item of Company IP or other Intellectual Property used or held for use in the business of the Company, (B) abandon, relinquish, permit to lapse or to be abandoned, invalidated, dedicated to the public, or disclaimed, or otherwise become unenforceable or fail to perform or make any applicable filings, recordings or other similar actions or filings, or fail to pay all required fees and Taxes required or advisable to maintain and protect its interest in, each and every material item of Company IP or other Intellectual Property used or held for use in the business of the Company or (C) disclose or otherwise make available to any person who is not subject to a written agreement to maintain the confidentiality of such trade secrets any material Trade Secret included in the Company IP or other Intellectual Property used or held for use in the business of the Company; (xv) waive, release, assign, settle or compromise any Action; or (xvi) enter into any formal or informal agreement or otherwise make a binding commitment to do any of the foregoing. Notwithstanding the foregoing, the Company shall not be prohibited from taking any of the foregoing actions to the extent that any of the foregoing are required by the existing terms of any of Company Securities presently outstanding, in which case, the Company may take such actions as are required to fulfill its obligations under such Company Securities. Nothing herein shall require the Company to obtain consent from Parent to do any of the foregoing if obtaining such consent might reasonably be expected to violate applicable Law, and nothing contained in this Section 6.1 shall give to Parent, directly or indirectly, the right to control or direct the ordinary course of business operations of the Company prior to the Closing Date. During the Interim Period, each of Parent and the Company shall exercise, consistent with the terms and conditions hereof, complete control and supervision of its respective operations.
Appears in 4 contracts
Samples: Merger Agreement (Progressive Care Inc.), Merger Agreement (NextPlat Corp), Merger Agreement (Progressive Care Inc.)
Conduct of Business by the Company Pending the Merger. (a) The Company agrees that, between the date of this Agreement and the Effective Time or the earlier termination of this Agreement (the “Interim Period”)Agreement, except as (1) expressly contemplated by any other provision of this Agreement or Agreement, any Ancillary Agreement, (2) as set forth in Section 6.1 6.01 of the Company Disclosure Schedule, and (3) as required by applicable Law (including COVID-19 Measures or as may be requested or compelled by any Governmental Authority), unless Parent BCAC shall otherwise consent in writing (which consent shall not be unreasonably conditioned, withheld or delayed):
(i) the Company shall conduct its business in the ordinary course of business; and
(ii) the Company shall use its commercially reasonable efforts to preserve substantially intact in all material respects the current business organization of the Company, to keep available the services of the current officers officers, key employees and employees consultants of the Company, Company and to preserve in all material respects the current relationships of the Company with customers, Suppliers suppliers and other persons with whom which the Company has significant business relations.
(b) By way of amplification and not limitation, except as (i1) expressly contemplated by any other provision of this Agreement or Agreement, any Ancillary Agreement, (ii2) as set forth in Section 6.1(b) 6.01 of the Company Disclosure Schedule, or and (iii3) as required by applicable Law (including COVID-19 Measures or as may be requested or compelled by any Governmental Authority), the Company shall not, during between the Interim Perioddate of this Agreement and the Effective Time or the earlier termination of this Agreement, directly or indirectly, do any of the following without the prior written consent of Parent BCAC (which consent shall not be unreasonably conditioned, withheld or delayed):
(i) amend or otherwise change the Company Organizational Documents its certificate of incorporation or equivalent organizational documentsbylaws;
(ii) issue, sell, pledge, dispose of, grant or encumber or subject to any Lienencumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, or otherwise amend any terms of, (A) any shares of any class of Capital Stockcapital stock of the Company, or any Company Optionsoptions, Company Warrants, Company RSUswarrants, convertible securities (including the Company Convertible Notes) or other rights of any kind to acquire any shares of such Capital Stockcapital stock, or any other ownership interest (including, without limitation, any phantom interest), of the Company, provided that (x) the exercise, conversion or settlement or vesting of any Company Awards in the ordinary course Preferred Stock, Company Options or Company Warrants or (y) grants of business and issuance of securities pursuant to existing employment or similar agreements with employees, officers and directors of the Company Options that would be permitted by Section 6.01(b)(vii) shall not require the consent of Parent, and provided, further, that the Company shall be permitted to grant Company Awards in accordance with Section 6.1(b)(ii) of the Company Disclosure ScheduleBCAC; or (B) any material assets of the Company;
(iii) adopt a plan of, or otherwise enter into or effect a, complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of the Company (other than the Merger), acquire any equity interest or other interest in any other entity or enter into a joint venture, partnership, business association or other similar arrangement with any other entity;
(iv) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, excluding with respect to any dividend payable in the form of shares of Capital Stockits capital stock;
(viv) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of its capital stock, other than redemptions of equity securities from former employees upon the terms set forth in the underlying agreements governing such equity securities;
(viv) (A) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or substantially all of the assets or any other business combination) any person, corporation, partnership, other business organization or any division thereof, thereof in each casean amount in excess of $300,000; or (B) incur any indebtedness for borrowed money in excess of $300,000 or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any person, or make any loans or advances, or intentionally grant any security interest in any of its assets, in each case, except in the ordinary course of business;
(vi) enter into or adopt a plan or agreement of reorganization, merger or consolidation or adopt a plan of complete or partial liquidation or dissolution;
(vii) (A) grant any increase except in the compensation ordinary course of business or incentives payable or to become payable to any current or former directoras would not create a material liability on the Company, officer, employee or service provider of the Company that has a base salary or compensation in excess of $425,000 (each, a “Company Service Provider”), (B) enter into any new, or terminate or materially amend any existing, employment, retention, bonus, change in control, existing employment or severance or termination agreement with any Company Service Provider, (C) accelerate director or commit to accelerate the funding, payment, or vesting of any compensation or benefits to any Company Service Provider, (D) establish or become obligated under any collective bargaining agreement or other contract or agreement with a labor union, trade union, works council, or other representative of employees, (E) hire any new employee whose individual base compensation shall exceed $250,000, provided that such new employee receives compensation and benefits that are no more favorable than those provided to similarly situated employees executive officer of the Company, or (FB) terminate make any change to employee compensation, incentives or benefits after the employment (other than for cause) filing of any Company Service Provider whose individual base compensation exceeds $125,000, except the Registration Statement that notwithstanding anything herein would reasonably be expected to require an amendment to the contrary, the Company may (1) provide increases in salary, wages, bonuses or benefits to employees as required Registration Statement under the terms of any Plan in existence as of the date of this Agreement and reflected on Section 4.10 of the Company Disclosure Schedule or, for employees whose base compensation is less than $125,000, in the ordinary course of business consistent with past practice, (2) change the title of its employees in the ordinary course of business, and (3) make annual or quarterly bonus or commission payments in the ordinary course of business consistent with past practice and in accordance with the bonus or commission plans existing on the date of this Agreementapplicable Law;
(viii) other than as required by Law take any action where such action could reasonably be expected to prevent or pursuant to impede the terms of a Plan entered into prior to Transactions from qualifying for the date of this Agreement and reflected on Section 4.10 of the Company Disclosure Schedule, grant any severance or termination pay to (A) any director or officer of the Company or (B) other than in the ordinary course of business consistent with past practice, any other current employee of the CompanyIntended Tax Treatment;
(ix) adoptenter into any contract or agreement with any union, amend works council or terminate any material Plan or any Employee Benefit Plan that would be a Plan if in effect as of labor organization covering the date hereof except (A) as may be required by applicable Law, (B) as is required in order to consummate the Transactions, or (C) in connection with health and welfare plan renewals in the ordinary course of business consistent with past practice (provided that such renewals do not materially increase the cost to the Company of providing such benefits)Company’s employees;
(x) waive the restrictive covenant obligations of any employee of the Company;
(xi) materially amend or change any of the Company’s accounting policies or procedures, other than reasonable and usual amendments in the ordinary course of business or as may be required by a GAAP;
(xi) make, change in GAAPor revoke any Tax election, amend any Tax Return or settle or compromise any material United States federal, state, local or non-United States income Tax liability or consent to any extension or waiver of the limitation period applicable to any claim or assessment for any amount of Tax relating to the Company;
(xii) materially amend, or modify or consent to the termination (excluding any expiration in accordance with its terms) of any Material Contract or amend, waive, modify or consent to the termination (excluding any expiration in accordance with its terms) of the Company’s material rights thereunder, in each case in a manner that is materially adverse to the Company, taken as a whole, except in the ordinary course of business;
(xiii) fail acquire or lease, or agree to use reasonable efforts to prosecuteacquire or lease, protect, enforce and maintain, material Company IPany real property;
(xiv) (A) acquire, license, sublicense, waive, covenant not to assert, pledge, sell, transfer, assign or otherwise dispose of, divest or spin-off, intentionally permit any material item of Company IP or other Intellectual Property used or held for use in the business of the Company, (B) abandon, relinquish, permit to lapse or to be abandoned, invalidated, dedicated to the public, or disclaimed, or otherwise become unenforceable or fail to perform or make any applicable filings, recordings or other similar actions or filings, or fail to pay all required fees and Taxes taxes required or advisable to maintain and protect its interest in, in each and every material item of Company IP or other Intellectual Property used or held for use in the business of the Company or (C) disclose or otherwise make available to any person who is not subject to a written agreement to maintain the confidentiality of such trade secrets any material Trade Secret included in the Company IP or other Intellectual Property used or held for use in the business of the CompanyIP;
(xv) waive, release, assigninitiate, settle or compromise any ActionActions;
(xvi) enter into any Contract, understanding or commitment that contains any restrictive covenant or otherwise restrains, restricts, limits or impedes the ability of the Company to compete with or conduct any business in any geographic area or solicit the employment of any Persons; or
(xvixvii) enter into any formal or informal agreement or otherwise make a binding commitment to do any of the foregoing. Notwithstanding the foregoing, the Company shall not be prohibited from taking any of the foregoing actions to the extent that any of the foregoing are required by the existing terms of any of Company Securities presently outstanding, in which case, the Company may take such actions as are required to fulfill its obligations under such Company Securities. Nothing herein shall require the Company to obtain consent from Parent to do any of the foregoing if obtaining such consent might reasonably be expected to violate applicable Law, and nothing contained in this Section 6.1 shall give to Parent, directly or indirectly, the right to control or direct the ordinary course of business operations of the Company prior to the Closing Date. During the Interim Period, each of Parent and the Company shall exercise, consistent with the terms and conditions hereof, complete control and supervision of its respective operations.
Appears in 4 contracts
Samples: Business Combination Agreement (Apexigen, Inc.), Business Combination Agreement (Apexigen, Inc.), Business Combination Agreement (Brookline Capital Acquisition Corp.)
Conduct of Business by the Company Pending the Merger. (a) The the Company agrees that, between the date of this Agreement and the Effective Time or the earlier termination of this Agreement (the “Interim Period”)Agreement, except as (1) expressly contemplated by any other provision of this Agreement or any Ancillary Agreement, (2) as set forth in Section 6.1 6.01 of the Company Disclosure Schedule, and or (3) as required by applicable Law (including COVID-19 Measures or as may be requested or compelled by any Governmental Authority), unless Parent Kensington shall otherwise consent in writing (which consent shall not be unreasonably conditioned, withheld or delayed):
(i) the Company shall conduct its business in the ordinary course of businessbusiness and in a manner consistent with past practice; and
(ii) the Company shall use its commercially reasonable efforts to preserve substantially intact in all material respects the business organization of the Company, to keep available the services of the current officers officers, key employees and employees consultants of the Company, Company and to preserve in all material respects the current relationships of the Company with customers, Suppliers suppliers and other persons with whom which the Company has significant business relations.
(b) By way of amplification and not limitation, except as (i1) expressly contemplated by any other provision of this Agreement or Agreement, any Ancillary Agreement, (ii2) as set forth in Section 6.1(b) 6.01 of the Company Disclosure Schedule, or and (iii3) as required by applicable Law (including COVID-19 Measures or as may be requested or compelled by any Governmental Authority), the Company shall not, during between the Interim Perioddate of this Agreement and the Effective Time or the earlier termination of this Agreement, directly or indirectly, do any of the following without the prior written consent of Parent Kensington (which consent shall not be unreasonably conditioned, withheld or delayed):
(i) amend or otherwise change the Company Organizational Documents its certificate of incorporation or equivalent organizational documentsbylaws;
(ii) issue, sell, pledge, dispose of, grant or encumber or subject to any Lienencumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, or otherwise amend any terms of, (A) any shares of any class of Capital Stockcapital stock of the Company, or any Company Optionsoptions, Company Warrants, Company RSUswarrants, convertible securities (including the Company Convertible Notes) or other rights of any kind to acquire any shares of such Capital Stockcapital stock, or any other ownership interest (including, without limitation, any phantom interest), of the Company; provided, provided however, that (1) the exercise, exercise or settlement or vesting of any Company Awards in Options, grants of Company Options, Company RSUs or grants of Company Restricted Stock within the ordinary course of business and issuance of securities pursuant to existing employment or similar agreements with employees, officers and directors limits of the Company Option Plan share reserve and (2) the sale (including executed commitments providing for sale) of shares of Series F Preferred Stock to investors at a price per share of at least $26.42 shall not require the consent of Parent, and provided, further, that the Company shall be permitted to grant Company Awards in accordance with Section 6.1(b)(ii) of the Company Disclosure ScheduleKensington; or (B) any material assets of the Company;
(iii) adopt a plan of, or otherwise enter into or effect a, complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of the Company (other than the Merger), acquire any equity interest or other interest in any other entity or enter into a joint venture, partnership, business association or other similar arrangement with any other entity;
(iv) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, excluding with respect to any dividend payable in the form of shares of Capital Stockits capital stock;
(viv) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of its capital stock, other than redemptions of equity securities from former employees upon the terms set forth in the underlying agreements governing such equity securities;
(viv) (A) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or substantially all of the assets or any other business combination) any corporation, partnership, other business organization or any division thereof, thereof in each casean amount in excess of $5,000,000; or (B) incur any indebtedness for borrowed money in excess of $5,000,000 or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any person, or make any loans or advances, or intentionally grant any security interest in any of its assets, in each case, except with respect to accounts payable or indebtedness otherwise incurred in the ordinary course of business and consistent with past practice;
(viivi) (A) grant any increase in the compensation compensation, incentives or incentives benefits payable or to become payable to any current or former director, officer, employee or service provider consultant of the Company that has a as of the date of this Agreement, other than increases in base salary or compensation of employees in excess the ordinary course of $425,000 (each, a “Company Service Provider”)business, (B) enter into any new, or terminate or materially amend any existing, employment, retention, bonus, change in control, existing employment or severance or termination agreement with any Company Service Providercurrent or former director, officer, employee or consultant, (C) accelerate or commit to accelerate the funding, payment, payment or vesting of any compensation or benefits to any Company Service Providercurrent or former director, officer, employee or consultant, (D) establish hire or become obligated under otherwise enter into any employment or consulting agreement or arrangement with any person or terminate any current or former director, officer employee or consultant provider whose compensation would exceed, on an annualized basis, $300,000, or (E) enter into or amend any collective bargaining agreement or other contract or labor agreement with a labor union, trade union, works council, or other representative of employees, (E) hire any new employee whose individual base compensation shall exceed $250,000, provided that such new employee receives compensation and benefits that are no more favorable than those provided to similarly situated employees of covering the Company, (F) terminate the employment (other than for cause) of any Company Service Provider whose individual base compensation exceeds $125,000, except that notwithstanding anything herein to the contrary, the Company may (1) provide increases in salary, wages, bonuses or benefits to employees as required under the terms of any Plan in existence as of the date of this Agreement and reflected on Section 4.10 of the Company Disclosure Schedule or, for employees whose base compensation is less than $125,000, in the ordinary course of business consistent with past practice, (2) change the title of its employees in the ordinary course of business, and (3) make annual or quarterly bonus or commission payments in the ordinary course of business consistent with past practice and in accordance with the bonus or commission plans existing on the date of this Agreement’s employees;
(viiivii) other than as required by Law or pursuant to the terms of a Plan an agreement entered into prior to the date of this Agreement and reflected on Section 4.10 4.10(a) of the Company Disclosure Schedule, Schedule or that the Company is not prohibited from entering into after the date of this Agreement grant any severance or termination pay to (A) to, any director or officer of the Company or (B) Company, other than in the ordinary course of business consistent with past practice, any other current employee of the Company;
(ixviii) adopt, amend or and/or terminate any material Plan or any Employee Benefit Plan that would be a Plan if in effect as of the date hereof except (A) as may be required by applicable Law, (B) as is required necessary in order to consummate the Transactions, or (C) in connection with health and welfare plan renewals in the ordinary course of business consistent with past practice (provided that such renewals do not materially increase the cost to the Company of providing such benefits)business;
(x) waive the restrictive covenant obligations of any employee of the Company;
(xiix) materially amend or change any of the Company’s accounting policies or procedures, other than reasonable and usual amendments in the ordinary course of business business, with respect to accounting policies or procedures, other than as may be required by a change in GAAP;
(xiix) make any material tax election, amend a material Tax Return or settle or compromise any material United States federal, state, local or non-United States income tax liability;
(xi) materially amend, or modify or consent to the termination (excluding any expiration in accordance with its terms) of any Material Contract or amend, waive, modify or consent to the termination (excluding any expiration in accordance with its terms) of the Company’s material rights thereunder, in each case in a manner that is adverse to the Company, taken as a whole, except in the ordinary course of business;
(xiiixii) fail to use reasonable efforts to prosecute, protect, enforce and maintain, material Company IP;
(xiv) (A) acquire, license, sublicense, waive, covenant not to assert, pledge, sell, transfer, assign or otherwise dispose of, divest or spin-off, intentionally permit any material item of Company Owned IP or other Intellectual Property used or held for use in the business of the Company, (B) abandon, relinquish, permit to lapse or to be abandoned, invalidated, dedicated to the public, or disclaimed, or otherwise become unenforceable or fail to perform or make any applicable filings, recordings or other similar actions or filings, or fail to pay all required fees and Taxes taxes required or advisable to maintain and protect its interest in, each and every material item of Company IP or other Intellectual Property used or held for use in the business of the Company or (C) disclose or otherwise make available to any person who is not subject to a written agreement to maintain the confidentiality of such trade secrets any material Trade Secret included in the Company IP or other Intellectual Property used or held for use in the business of the Company;
(xv) waive, release, assign, settle or compromise any ActionOwned IP; or
(xvixiii) enter into any formal or informal agreement or otherwise make a binding commitment to do any of the foregoing. Notwithstanding the foregoing, the Company shall not be prohibited from taking any of the foregoing actions to the extent that any of the foregoing are required by the existing terms of any of Company Securities presently outstanding, in which case, the Company may take such actions as are required to fulfill its obligations under such Company Securities. Nothing herein shall require the Company to obtain consent from Parent to do any of the foregoing if obtaining such consent might reasonably be expected to violate applicable Law, and nothing contained in this Section 6.1 shall give to Parent, directly or indirectly, the right to control or direct the ordinary course of business operations of the Company prior to the Closing Date. During the Interim Period, each of Parent and the Company shall exercise, consistent with the terms and conditions hereof, complete control and supervision of its respective operations.
Appears in 1 contract
Samples: Business Combination Agreement (Kensington Capital Acquisition Corp.)
Conduct of Business by the Company Pending the Merger. (a) The Company agrees that, that between the date of this Agreement and the earlier of the Effective Time or and the earlier termination of this Agreement in accordance with its terms (the “Interim Pre-Closing Period”), except as (1) set forth in Section 5.01 of the Company Disclosure Letter, as expressly contemplated or as required by any other provision of this Agreement or any Ancillary Agreement, (2) as set forth in Section 6.1 of the Company Disclosure Schedule, and (3) as required by applicable Law (including as may be requested or compelled by Law, any Governmental Authority)Entity of competent jurisdiction or the rules or regulations of the NASDAQ, unless Parent shall otherwise consent agree in writing (which consent shall not be unreasonably conditioned, withheld or delayed):
writing: (i) the Company shall will, and will cause each Company Subsidiary to, conduct its business and operations: (a) in the ordinary course of businessand in accordance with past practices; and
and (b) in compliance in all material respects with all applicable Laws; (ii) the Company shall use its commercially reasonable efforts to preserve intact its current business organization, keeps available the services of its current officers and other employees and maintains its relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, distributors, resellers, employees and other persons having business relationships with the Company; and (iv) the Company shall promptly notify Parent in all material respects writing of (A) any written notice or other communication of which the business organization Company has knowledge from any person alleging that the Consent of such person is or may be required in connection with any of the Transactions, and (B) any Proceeding commenced, or, to the knowledge of the Company, threatened against, relating to, involving or otherwise affecting the Company that relates to keep available the services consummation of the current officers and employees Merger or any of the Companyother Transactions. Without limiting the foregoing, and to preserve except as set forth in all material respects the current relationships Section 5.01 of the Company with customersDisclosure Letter, Suppliers and other persons with whom the Company has significant business relations.
(b) By way of amplification and not limitation, except as (i) expressly contemplated or required by any other provision of this Agreement or any Ancillary Agreement, (ii) as set forth in Section 6.1(b) of the Company Disclosure Schedule, or (iii) as required by applicable Law (including as may be requested or compelled by Law, any Governmental Authority)Entity of competent jurisdiction or the rules or regulations of the NASDAQ, the Company shall not, and shall not permit any Company Subsidiary to, during the Interim Pre-Closing Period, directly or indirectly, do any of the following without the prior written consent of Parent (which consent solely in the case of clauses (j), (l), (m), (n), (u), (v), (z), (aa) and (bb) below shall not be unreasonably withheld, delayed or conditioned, withheld or delayed):
(ia) amend or otherwise change the Company Organizational Documents Charter or equivalent organizational documentsthe Company By-laws;
(iib) issue, sell, pledge, dispose of, grant or encumber or subject to any Lien, issue or authorize the issuance, sale, pledge, disposition, grant issuance of any equity securities in the Company or encumbrance ofany Company Subsidiary, or otherwise amend securities convertible into, or exchangeable or exercisable for, any terms of, (A) any shares of any class of Capital Stocksuch equity securities, or any Company Options, Company Warrants, Company RSUs, convertible securities (including the Company Convertible Notes) or other rights of any kind to acquire any shares such equity securities or such convertible or exchangeable securities, other than the issuance of such Capital StockShares upon the exercise of Company Options and options granted under the Company Stock Purchase Plan, or any other ownership interest (includingCompany Warrants and the vesting of RSUs, without limitation, any phantom interest), in each case outstanding as of the Company, provided that the exercise, settlement date of this Agreement or vesting otherwise permitted to be granted hereunder;
(c) sell or otherwise dispose of any properties or non-cash assets with a value in excess of $150,000 in the aggregate, except (i) sales or dispositions made in connection with any transaction between or among the Company Awards and any of the Company Subsidiaries or between or among the Company Subsidiaries or (ii) sales or dispositions made in the ordinary course of business and issuance business;
(d) declare, set aside, make or pay any dividend or other distribution with respect to the capital stock of securities the Company, whether payable in cash, stock, property or a combination thereof;
(e) other than (i) in the case of Company Subsidiaries, (ii) in connection with the exercise of any outstanding Company Options or Company Warrants permitted by the terms of such Company Options or Company Warrants, or the payment of related withholding Taxes, by net exercise, or Tax withholdings on the vesting or payment of RSUs or (iii) the purchase of shares pursuant to existing employment “10b5-1” plans, reclassify, combine, split, subdivide or similar agreements with employeesamend the terms of, officers and directors or redeem, purchase or otherwise acquire, directly or indirectly, any of the Company shall not require the consent of Parentits equity securities or any options, and providedwarrants, further, that the Company shall be permitted to grant Company Awards in accordance with Section 6.1(b)(ii) of the Company Disclosure Schedule; securities or (B) other rights exercisable for or convertible into any material assets of the Companysuch equity securities;
(iiif) merge or consolidate the Company or any Company Subsidiary with any person or adopt a plan of, of complete or otherwise enter into partial liquidation or effect a, resolutions providing for a complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of the Company, other than the merger of one or more Company Subsidiaries with or into one or more other Company Subsidiaries;
(g) make or offer to make any acquisition of a material business (including by merger, consolidation or acquisition of stock or assets), other than any acquisitions for consideration that is individually not in excess of $150,000, or in the aggregate not in excess of $300,000;
(h) incur any Indebtedness for borrowed money or issue any debt securities, or assume or guarantee the obligations of any person (other than the Mergera wholly-owned Company Subsidiary) for borrowed money, except (i) in connection with transactions permitted pursuant to Section 5.01(g), (ii) Indebtedness among the Company and any wholly-owned Company Subsidiaries or among wholly-owned Company Subsidiaries, (iii) for any guarantees by the Company of Indebtedness of any wholly-owned Company Subsidiaries or guarantees by wholly-owned Company Subsidiaries of Indebtedness of the Company or any other wholly-owned Company Subsidiaries and (iv) with respect to any Indebtedness not in accordance with clauses (i) through (iii), for any Indebtedness not to exceed $300,000 in the aggregate principal amount outstanding at any one time;
(i) make any loans, advances or capital contributions to, or investments in, any other person (other than any Company Subsidiary) other than (i) loans made in the ordinary course of business not to exceed $150,000 in the aggregate and (ii) in connection with transactions permitted pursuant to Section 5.01(g);
(j) except to the extent required by Law or the terms of any Company Benefit Plan or as specifically contemplated by Section 2.03 or Section 5.10: (i) increase the compensation or benefits payable or to become payable to its directors, officers or employees; (ii) grant any rights to severance or termination pay or other termination benefit, or enter into any employment or severance agreement; (iii) establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, pension, retirement, deferred compensation, employment, termination, severance or other plan or agreement; or (iv) take any action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability or funding under any Company Benefit Plan;
(k) except in each case to the extent required by Law, file any Tax Return inconsistent with past practice, make any Tax election inconsistent with past practice, settle or compromise any material Tax Proceeding, claim or assessment with respect to any Tax or Tax-related matter, amend or file a claim for refund with respect to any Company Returns, enter into or obtain any Tax ruling, enter into any Tax allocation, sharing or indemnity agreement relating to Taxes, consent to any extension or waiver of the limitations period applicable to any claim or assessment in respect of Taxes, or take any action that would reasonably be expected to have a material and adverse impact on the Tax liability of the Company or any Company Subsidiary;
(l) make any material change in accounting policies or procedures, other than as required by GAAP, applicable Law or any Governmental Entity of competent jurisdiction;
(m) make any capital expenditures that in the aggregate exceed $300,000;
(n) settle or compromise any Proceeding or series of Proceedings other than settlements or compromises of Proceedings that do not, individually or in the aggregate, involve the payment of more than $150,000 (net of any amount covered by insurance or indemnification) in excess of the amount reserved on the latest consolidated balance sheet of the Company in respect of such Proceedings, as set forth in the Company SEC Documents, and do not involve any material injunction or non-monetary relief on the Company or any of the Company Subsidiaries;
(o) amend or waive any of its rights under, or accelerate the vesting (other than in connection with any of the Transactions to the extent contemplated by this Agreement or as required under the applicable Contract existing as of the date of this Agreement) under, any provision of any of the Company Stock Plans or any provision of any Contract evidencing any outstanding Company Option or any restricted stock purchase agreement, or otherwise modify any of the terms of any outstanding option, restricted stock units, warrant or other security or any related Contract, other than any acceleration of vesting that occurs in accordance with the terms of a Company Contract in effect as of the date of this Agreement and disclosed in writing to Parent;
(p) form any Subsidiary or acquire any equity interest or other interest in any other entity or enter into a joint venture, partnership, business association or other similar arrangement with any other entityEntity;
(iv) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, excluding any dividend payable in the form of shares of Capital Stock;
(v) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of its capital stock, other than redemptions of equity securities from former employees upon the terms set forth in the underlying agreements governing such equity securities;
(vi) (A) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or substantially all of the assets or any other business combination) any corporation, partnership, other business organization or any division thereof, in each case; or (B) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any person, or make any loans or advances, or grant any security interest in any of its assets;
(vii) (A) grant any increase in the compensation or incentives payable or to become payable to any current or former director, officer, employee or service provider of the Company that has a base salary or compensation in excess of $425,000 (each, a “Company Service Provider”), (B) enter into any new, or terminate or amend any existing, employment, retention, bonus, change in control, or termination agreement with any Company Service Provider, (C) accelerate or commit to accelerate the funding, payment, or vesting of any compensation or benefits to any Company Service Provider, (D) establish or become obligated under any collective bargaining agreement or other contract or agreement with a labor union, trade union, works council, or other representative of employees, (E) hire any new employee whose individual base compensation shall exceed $250,000, provided that such new employee receives compensation and benefits that are no more favorable than those provided to similarly situated employees of the Company, (F) terminate the employment (other than for cause) of any Company Service Provider whose individual base compensation exceeds $125,000, except that notwithstanding anything herein to the contrary, the Company may (1) provide increases in salary, wages, bonuses or benefits to employees as required under the terms of any Plan in existence as of the date of this Agreement and reflected on Section 4.10 of the Company Disclosure Schedule or, for employees whose base compensation is less than $125,000, in the ordinary course of business consistent with past practice, (2) change the title of its employees in the ordinary course of business, and (3) make annual or quarterly bonus or commission payments in the ordinary course of business consistent with past practice and in accordance with the bonus or commission plans existing on the date of this Agreement;
(viii) other than as required by Law or pursuant to the terms of a Plan entered into prior to the date of this Agreement and reflected on Section 4.10 of the Company Disclosure Schedule, grant any severance or termination pay to (A) any director or officer of the Company or (Bq) other than in the ordinary course of business consistent with past practicepractices (A) enter into or become bound by, or permit any of the assets owned or used by it to become bound by, any Company Material Contract or (B) amend or terminate, or waive or exercise any material right or remedy under, any Company Material Contract other current employee than expiration of any Company Material Contract in accordance with its terms; provided, however, that notwithstanding the Companyforegoing, except as specifically provided in the last sentence of this Section 5.01, the Company shall not amend or terminate, or waive or exercise any material right or remedy under, or agree to any additional payment (other than the Forbearance Prepayment (as defined in the Forbearance Agreement) and the forbearance fee of $150,000, each as set forth in the Forbearance Agreement) under, the White Oak Agreement or the Forbearance Agreement without the prior written consent of Parent;
(ixr) adoptgrant any exclusive license or right with respect to any Company IP;
(s) except to the extent described in Section 5.01(s) of the Company Disclosure Letter, amend enter into, renew or terminate become bound by, or permit any material Plan of the assets owned or used by it to become bound by, any Employee Benefit Plan that Contract the effect of which would be a Plan if in effect to grant to any person following the Merger any actual or potential right or license to any Intellectual Property Right owned as of the date hereof except of this Agreement by the Company or Parent;
(At) as may be required by applicable Lawenter into, (B) as is required in order to consummate the Transactionsrenew or become bound by, or permit any of the assets owned or used by it to become bound by, any Contract containing, or otherwise subjecting the Company to, any non-competition, exclusivity or other material restriction on the operation of the business of the Company or Parent;
(Cu) in connection with health and welfare plan renewals other than in the ordinary course of business consistent with past practice practices, enter into, renew or become bound by, or permit any of the assets owned or used by it to become bound by, any Contract providing for future purchases of components, supplies or finished goods from any person providing contract manufacturing or other component manufacturing or aggregation services for future payment in excess of $300,000;
(provided v) acquire, lease or license any right or other asset from any other person or sell or otherwise dispose of, lease or license any right or other asset to any other person (except in each case for assets (that such renewals do are not materially increase material individually or in the cost to aggregate) acquired, leased, licensed or disposed of by the Company in the ordinary course of providing such benefitsbusiness and consistent with past practices), or, other than in the ordinary course of business in connection with the collection of accounts receivable, waive or relinquish any material right;
(w) other than in the ordinary course of business consistent with past practices, write off as uncollectible, or establish any extraordinary reserve with respect to, any receivable or other Indebtedness;
(x) waive the restrictive covenant obligations make any pledge of any employee of its material assets or permit any of its material assets to become subject to any Liens, except for Liens that do not materially detract from the value of such assets or materially impair the operations of the Company;
(xiy) materially establish, adopt or amend or change any of the Company’s accounting policies or procedures, other than reasonable and usual amendments in the ordinary course of business or as may be required by a change in GAAP;
(xii) materially amend, or modify or consent to the termination (excluding any expiration in accordance with its terms) of any Material Contract or amend, waive, modify or consent to the termination (excluding any expiration in accordance with its terms) of the Company’s material rights thereunder, in each case in a manner that is adverse to the Company, taken as a whole, except in the ordinary course of business;
(xiii) fail to use reasonable efforts to prosecute, protect, enforce and maintain, material Company IP;
(xiv) (A) acquire, license, sublicense, waive, covenant not to assert, pledge, sell, transfer, assign or otherwise dispose of, divest or spin-off, any material item of Company IP or other Intellectual Property used or held for use in the business investment policy of the Company, (B) abandon, relinquish, permit to lapse or to be abandoned, invalidated, dedicated to the public, or disclaimed, or otherwise become unenforceable or fail to perform or make any applicable filings, recordings or other similar actions or filings, or fail to pay all required fees and Taxes required or advisable to maintain and protect its interest in, each and every material item of Company IP or other Intellectual Property used or held for use in the business investment that is inconsistent with any investment policy of the Company or (C) disclose or otherwise make available to any person who is not subject to a written agreement to maintain the confidentiality of such trade secrets investment in any material Trade Secret included in the Company IP or other Intellectual Property used or held for use in the business of the Companymortgage-backed securities;
(xvz) waivecommence any Proceeding other than Proceedings commenced for the routine collection of bills;
(aa) pay, release, assigndischarge, settle or compromise satisfy any Action; orclaims (whether or not commenced prior to the date of this Agreement), except that the Company may pay, discharge, settle or satisfy any claim if the only obligation involved on the part of the Company will be payment of money in an amount not to exceed $150,000 individually and not to exceed $300,000 in the aggregate for all such claims during the Pre-Closing Period;
(xvibb) enter into any formal agree or informal agreement or otherwise make a binding commitment commit to do take any of the foregoing. Notwithstanding the foregoing, the Company shall not be prohibited from taking actions described in any of the foregoing actions to the extent that any clauses of the foregoing are required by the existing terms of any of Company Securities presently outstanding, in which case, the Company may take such actions as are required to fulfill its obligations under such Company Securitiesthis Section 5.01. Nothing herein shall require the Company to obtain consent from Parent to do any of the foregoing if obtaining such consent might reasonably be expected to violate applicable Law, and nothing contained in this Section 6.1 Agreement shall give to ParentParent or Sub, directly or indirectly, the right to control or direct the ordinary course of business operations of the Company prior to the Closing DateEffective Time. During Prior to the Interim PeriodEffective Time, each of Parent and the Company shall exercise, consistent with subject to the terms and conditions hereofof this Agreement, complete unilateral control and supervision of over its respective business operations. Notwithstanding anything to the contrary in this Agreement, the Company may, without Parent’s consent, amend the Forbearance Agreement solely to extend the Forbearance Expiration Date thereunder if the Effective Time has not occurred prior to the Forbearance Expiration Date.
Appears in 1 contract
Conduct of Business by the Company Pending the Merger. (a) The Company covenants and agrees that, between the date of this Agreement and prior to the Effective Time or the earlier termination of this Agreement (the “Interim Period”), except as (1) expressly contemplated by any other provision of this Agreement or any Ancillary Agreement, (2) as set forth in Section 6.1 of the Company Disclosure Schedule, and (3) as required by applicable Law (including as may be requested or compelled by any Governmental Authority)Time, unless Parent shall otherwise consent in writing (which consent shall not be unreasonably conditionedwriting, withheld or delayed):except as expressly permitted or required pursuant to this Agreement:
(ia) The businesses of the Company and the Company Subsidiaries shall conduct its business be conducted only in the ordinary and usual course of businessbusiness and consistent with past practices, and the Company and the Company Subsidiaries shall use their commercially reasonable efforts to maintain and preserve intact their respective business organizations and to maintain their significant beneficial business relationships with suppliers, contractors, distributors, customers, landlords, licensors, licensees and others having material business relationships with them; and
(iib) Without limiting the Company shall use its commercially reasonable efforts to preserve intact in all material respects the business organization generality of the Company, to keep available the services of the current officers and employees of the Company, and to preserve in all material respects the current relationships of the Company with customers, Suppliers and other persons with whom the Company has significant business relations.
(b) By way of amplification and not limitationforegoing Section 5.1(a), except as (i) expressly contemplated by any other provision of this Agreement or any Ancillary Agreement, (ii) as set forth in Section 6.1(b) 5.1 of the Company Disclosure Schedule, Letter or (iii) unless Parent shall otherwise consent in writing or except as expressly permitted or required by applicable Law (including as may be requested or compelled by any Governmental Authority)pursuant to this Agreement, the Company shall not, during and shall not permit any of the Interim Period, directly or indirectlyCompany Subsidiaries to, do any of the following without the prior written consent of Parent (which consent shall not be unreasonably conditioned, withheld or delayed):following:
(i) amend other than in ordinary course of business consistent with past practice, (A) acquire, sell, lease, transfer or otherwise change dispose of any assets, rights or securities that are material to the Company Organizational Documents and the Company Subsidiaries, considered as a single enterprise, or equivalent organizational documents(B) terminate, cancel, materially modify or enter into any material commitment, transaction, line of business or other agreement;
(ii) acquire by merging or consolidating with or by purchasing a substantial equity interest in or a substantial portion of the assets of, or by any other manner, any business, corporation, partnership, association or other business organization or division thereof;
(iii) amend or propose to amend its certificate of incorporation or bylaws or, in the case of the Company Subsidiaries, their respective constituent documents;
(iv) declare, set aside or pay any dividend or other distribution payable in cash, capital stock, property or otherwise with respect to any shares of its capital stock;
(v) purchase, redeem or otherwise acquire, or offer to purchase, redeem or otherwise acquire, any shares of its capital stock, other equity securities, other ownership interests or any options, warrants or rights to acquire any such stock, securities or interests, other than in connection with (x) the relinquishment of shares by former or current employees and directors of the Company in payment of withholding Tax upon the vesting of Restricted Stock Unit awards or (y) the cashless or net exercise of Options;
(vi) split, combine or reclassify any outstanding shares of its capital stock;
(vii) except for the Company Common Stock issuable upon exercise or conversion of Options outstanding on the date hereof (or granted after the date hereof as permitted by this Agreement), and the vesting of Restricted Stock Unit awards granted prior to the execution of this Agreement, issue, grant, sell, pledge, dispose of, grant reprice or encumber or subject to any Lienaccelerate the vesting of, or authorize authorize, propose or agree to the issuance, grant, sale, pledgedisposition by, dispositionor repricing or acceleration of vesting by, grant the Company or encumbrance any of the Company Subsidiaries of, any shares of, or otherwise amend any terms ofoptions, (A) any shares of any class of Capital Stockwarrants, RSUs or any Company Options, Company Warrants, Company RSUs, convertible securities (including the Company Convertible Notes) or other rights of any kind to acquire any shares of, or any securities convertible into or exchangeable for any shares of, its capital stock of such Capital Stockany class, or any other ownership interest (includingsecurities in respect of, without limitationin lieu of, or in substitution for any phantom interest), class of its capital stock outstanding on the Company, provided that the exercise, settlement or vesting of any Company Awards in the ordinary course of business and issuance of securities pursuant to existing employment or similar agreements with employees, officers and directors of the Company shall not require the consent of Parent, and provided, further, that the Company shall be permitted to grant Company Awards in accordance with Section 6.1(b)(ii) of the Company Disclosure Schedule; or (B) any material assets of the Companydate hereof;
(iii) adopt a plan of, or otherwise enter into or effect a, complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of the Company (other than the Merger), acquire any equity interest or other interest in any other entity or enter into a joint venture, partnership, business association or other similar arrangement with any other entity;
(iv) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, excluding any dividend payable in the form of shares of Capital Stock;
(v) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of its capital stock, other than redemptions of equity securities from former employees upon the terms set forth in the underlying agreements governing such equity securities;
(vi) (A) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or substantially all of the assets or any other business combination) any corporation, partnership, other business organization or any division thereof, in each case; or (Bviii) incur any indebtedness for borrowed money or issue guarantee any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations such indebtedness of any person, or another Person;
(ix) make any loans or advances, or grant any security interest in any of its assets;
(vii) except (A) grant any increase in to or for the compensation or incentives payable or to become payable to any current or former director, officer, employee or service provider benefit of the Company that has a base salary Subsidiaries; or compensation in excess of $425,000 (each, a “Company Service Provider”), (B) enter into any new, or terminate or amend any existing, employment, retention, bonus, change in control, or termination agreement with any Company Service Provider, (C) accelerate or commit to accelerate the funding, payment, or vesting of any compensation or benefits to any Company Service Provider, (D) establish or become obligated under any collective bargaining agreement or other contract or agreement with a labor union, trade union, works council, or other representative of employees, (E) hire any new employee whose individual base compensation shall exceed $250,000, provided that such new employee receives compensation and benefits that are no more favorable than those provided to similarly situated employees of the Company, (F) terminate the employment (other than for cause) of any Company Service Provider whose individual base compensation exceeds $125,000, except that notwithstanding anything herein to the contrary, the Company may (1) provide increases in salary, wages, bonuses or benefits to employees as required under the terms of any Plan in existence as of the date of this Agreement and reflected on Section 4.10 of the Company Disclosure Schedule or, for employees whose base compensation is less than $125,000, in the ordinary course of business consistent with past practice;
(x) (A) grant or increase any severance or termination pay to any current or former director or executive officer or any employee of the Company or any Company Subsidiary (it being understood that the hiring of a new employee who is not an executive officer and who is subject to the existing severance and termination policies of the Company, or the payment of severance to an employee in accordance with the existing severance policies of the Company that are provided in writing to Parent, shall not constitute the grant or increase of any severance or termination pay), (2B) change execute any employment, deferred compensation or other similar agreement (or any amendment to any such existing agreement) with any such director, executive officer or employee of the title Company or any Company Subsidiary, (C) increase the benefits payable under any existing severance or termination pay policies or employment agreements, (D) increase the compensation, bonus or other benefits of its employees current or former directors or executive officers of the Company or any Company Subsidiary, or, other than in the ordinary course of business, and of any employee of the Company or any Company Subsidiary, (3E) make annual adopt or quarterly bonus establish any new employee benefit plan or commission amend in any material respect any existing employee benefit plan, (F) provide any material benefit to a current or former director, executive officer or employee of the Company or any Company Subsidiary not required by any existing agreement or employee benefit plan, or (G) take any action that would result in its incurring any obligation for any payments or benefits described in subsections (i), (ii) or (iii) of Section 3.10(h) (without regard to whether the Transactions are consummated), except in the ordinary course case of business consistent with past practice and action under subsections (A) through (G), to the extent required in accordance with the bonus a written contract or commission plans existing on agreement in existence as of the date of this Agreement;
(viiixi) execute or amend in any material respect any material employment, consulting, severance or indemnification agreement between the Company or any of the Company Subsidiaries and any of their respective directors, officers, agents, consultants or employees, or any collective bargaining agreement or other obligation to any labor organization or employee incurred or entered into by the Company or any of the Company Subsidiaries (other than as required by Law existing employee benefit plans or pursuant to the terms of a Plan entered into prior to the date of this Agreement and reflected on Section 4.10 of the Company Disclosure Schedule, grant any severance employment agreements or termination pay to by applicable Law);
(A) any director or officer of the Company or (Bxii) other than in the ordinary course of business consistent with past practice, make or file any changes in its reporting for Taxes or accounting methods other current employee than as required by GAAP or applicable Law; make, change or rescind any Tax election; make any change to its method of the Company;
reporting income, deductions, or other Tax items for Tax purposes; file any amended Tax Return (ix) adopt, amend or terminate any material Plan or any Employee Benefit Plan that would be a Plan if in effect except as of the date hereof except (A) as may be required by applicable Law), (B) as is required settle or compromise any Tax liability, waive or extend the statute of limitations in order to consummate the Transactionsrespect of Taxes, or (C) in connection enter into any transaction with health and welfare plan renewals in an affiliate outside the ordinary course of business consistent with past practice (provided that if such renewals do not materially increase the cost transaction would give rise to the Company of providing such benefits)a material Tax liability;
(xxiii) waive settle, compromise or otherwise resolve any material disputed claim or disputed liability, any material litigation, arbitration or other legal proceeding or any other material controversy, other than in an amount involving not more than $100,000 individually or $250,000 in the restrictive covenant obligations of any employee of the Companyaggregate;
(xixiv) materially amend or change any of the Company’s accounting policies or procedures, other than reasonable and usual amendments in the ordinary course of business or as may be required by a change in GAAP;
(xii) materially amend, or modify or consent to the termination (excluding any expiration in accordance with its terms) of any Material Contract or amend, waive, modify or consent to the termination (excluding any expiration in accordance with its terms) of the Company’s material rights thereunder, in each case in a manner that is adverse to the Company, taken as a whole, except in the ordinary course of business;
(xiii) fail to use reasonable efforts to prosecute, protectpay or discharge any claims, enforce and maintain, material Company IP;
(xiv) (A) acquire, license, sublicense, waive, covenant not to assert, pledge, sell, transfer, assign Liens or otherwise dispose of, divest liabilities involving more than $100,000 individually or spin-off, any material item of Company IP or other Intellectual Property used or held for use $250,000 in the business of the Company, (B) abandon, relinquish, permit to lapse or to be abandoned, invalidated, dedicated to the public, or disclaimed, or otherwise become unenforceable or fail to perform or make any applicable filings, recordings or other similar actions or filings, or fail to pay all required fees and Taxes required or advisable to maintain and protect its interest in, each and every material item of Company IP or other Intellectual Property used or held for use in the business of the Company or (C) disclose or otherwise make available to any person who is not subject to a written agreement to maintain the confidentiality of such trade secrets any material Trade Secret included in the Company IP or other Intellectual Property used or held for use in the business of the Companyaggregate;
(xv) waive, release, assign, settle make or compromise any Action; orcommit to make capital expenditures exceeding the aggregate budgeted amount set forth in the Company’s fiscal 2010 capital expenditure plan made available to Parent;
(xvi) enter into or commit to enter into any formal new Lease other than those disclosed to Parent on the new store openings schedule made available to Parent;
(xvii) other than for cause and in a manner that does not result in the payment of any severance, hire or informal agreement terminate the employment of any executive officer;
(xviii) enter into any agreement, arrangement or commitment that materially limits or otherwise make a binding commitment to do materially restricts the Company or any Company Subsidiary, or that would reasonably be expected to, after the Effective Time, materially limit or restrict the Parent or any of the foregoing. Notwithstanding the foregoing, the Company shall not be prohibited from taking its Subsidiaries or any of the foregoing actions their respective affiliates or any successor thereto, from engaging or competing in any line of business in which it is currently engaged or in any geographic area material to the extent that business or operations of Parent or any of the foregoing are required by the existing terms of its Subsidiaries;
(xix) take any of Company Securities presently outstanding, in which case, the Company may take such actions as are required to fulfill its obligations under such Company Securities. Nothing herein shall require the Company to obtain consent from Parent to do any of the foregoing if obtaining such consent might action that has or would reasonably be expected to violate applicable Lawhave a material adverse effect on the Transactions or the Company’s ability to consummate the Transactions; or
(xx) authorize, and nothing contained take or agree, in this Section 6.1 shall give writing or otherwise, to Parenttake, directly or indirectlyotherwise commit to take, the right to control or direct the ordinary course of business operations any of the Company prior to the Closing Date. During the Interim Period, each of Parent and the Company shall exercise, consistent with the terms and conditions hereof, complete control and supervision of its respective operationsactions precluded by Sections 5.1(a) or (b).
Appears in 1 contract
Conduct of Business by the Company Pending the Merger. (a) The Company agrees that, between the date of this Agreement and the Effective Time or the earlier termination of this Agreement (the “Interim Period”), except as (1) expressly contemplated by any other provision of this Agreement or any Ancillary Agreement, (2) as set forth in Section 6.1 6.01 of the Company Disclosure Schedule, and (3) as required by applicable Law (including as may be requested or compelled by any Governmental Authority), unless Parent shall otherwise consent in writing (which consent shall not be unreasonably conditioned, withheld or delayed):
(i) the Company shall conduct its business in the ordinary course of business; and
(ii) the Company shall use its commercially reasonable efforts to preserve substantially intact in all material respects the business organization of the Company, to keep available the services of the current officers and employees Key Employees of the Company, Company and to preserve in all material respects the current relationships of the Company with customers, Suppliers and other persons with whom which the Company has significant business relations.
(b) By way of amplification and not limitation, except as (i1) expressly contemplated by any other provision of this Agreement or any Ancillary Agreement, (ii2) as set forth in Section 6.1(b6.01(b) of the Company Disclosure Schedule, or and (iii3) as required by applicable Law (including as may be requested or compelled by any Governmental Authority), the Company shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of Parent (which consent shall not be unreasonably conditioned, withheld or delayed):
(i) amend or otherwise change the Company Organizational Documents its certificate of incorporation or bylaws or equivalent organizational documents;
(ii) issue, sell, pledge, dispose of, grant or encumber or subject to any Lien, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, or otherwise amend (except as set forth in Section 3.01(a) or Section 3.01(b)) any terms of, (A) any shares of any class of Capital Stockcapital stock of the Company, or any Company Optionsoptions, Company Warrantswarrants, Company RSUsrestricted stock units, convertible securities (including the Company Convertible Notes) or other rights of any kind to acquire any shares of such Capital Stockcapital stock, or any other ownership interest (including, without limitation, any phantom interest), of the Company, provided that (1) the exercise, settlement or vesting of any Company Awards in the ordinary course of business business, (2) the issue of convertible promissory notes on the same terms and issuance of securities pursuant to existing employment or similar agreements with employees, officers and directors of conditions as the Company Convertible Notes, (3) the issue of warrants to purchase Company Common Stock on the same terms and conditions as the Company Warrants issued in connection with the issue of Company Convertible Notes, or (4) entering into the Bridge Financing (collectively, the “Permitted Financings”) shall not require the consent of Parent, and provided, further, that the Company shall be permitted to grant Company Awards in accordance with Section 6.1(b)(ii6.01(b)(ii) of the Company Disclosure Schedule; or (B) any material assets of the Company;
(iii) adopt a plan of, or otherwise enter into or effect a, complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of the Company (other than the Merger), acquire any equity interest or other interest in any other entity or enter into a joint venture, partnership, business association or other similar arrangement with any other entity;
(iv) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, excluding any dividend payable in the form of shares of Capital Stock;
(v) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of its capital stock, other than redemptions of equity securities from former employees upon the terms set forth in the underlying agreements governing such equity securities;
(vi) (A) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or substantially all of the assets or any other business combination) any corporation, partnership, other business organization or any division thereof, in each case; or (B) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any person, or make any loans or advances, or grant any security interest in any of its assets, in excess of $3,000,000 in the aggregate or in a Permitted Financing;
(vii) (A) except as provided for through the New Employment Agreements or a promotion, grant any increase in the compensation or incentives payable or to become payable to any current or former director, officer, employee (including any Key Employee) or service provider of the Company that has a base salary or compensation in excess of $425,000 (each, a “Company Service Provider”), (B) except through or in connection with the New Employment Agreements or a promotion, enter into any new, or terminate or amend any existing, employment, retention, bonus, change in control, or termination agreement with any Company Service Provider, (C) except as provided for through the New Employment Agreements, accelerate or commit to accelerate the funding, payment, or vesting of any compensation or benefits to any Company Service Provider, (D) establish or become obligated under any collective bargaining agreement or other contract or agreement with a labor union, trade union, works council, or other representative of employees, (E) hire any new employee whose individual base compensation shall exceed $250,000, provided that such new employee receives compensation and benefits that are no more favorable than those provided to similarly situated employees of the Company, (F) terminate the employment (other than for cause) of any Company Service Provider whose individual base compensation exceeds $125,000, except that notwithstanding anything herein to the contrary, the Company may (1) provide increases in salary, wages, bonuses or benefits to employees as required under the terms of any Plan in existence as of the date of this Agreement and reflected on Section 4.10 0 of the Company Disclosure Schedule or, for employees (other than Key Employees) whose base compensation is less than $125,000, in the ordinary course of business consistent with past practice, (2) change the title of its employees (other than Key Employees) in the ordinary course of business, and (3) make annual or quarterly bonus or commission payments in the ordinary course of business consistent with past practice and in accordance with the bonus or commission plans existing on the date of this Agreement;
(viii) other than as required by Law or pursuant to the terms of a Plan entered into prior to the date of this Agreement and reflected on Section 4.10 0 of the Company Disclosure ScheduleSchedule or as provided for through the New Employment Agreements, grant any severance or termination pay to (A) any Key Employee or any director or officer of the Company or (B) other than in the ordinary course of business consistent with past practice, any other current employee of the Company;
(ix) adopt, amend or terminate any material Plan or any Employee Benefit Plan that would be a Plan if in effect as of the date hereof except (A) as may be required by applicable Law, (B) as is required in order to consummate the Transactions, or (C) in connection with health and welfare plan renewals in the ordinary course of business consistent with past practice (provided that such renewals do not materially increase the cost to the Company of providing such benefits);
(x) waive the restrictive covenant obligations of any employee of the Company;
(xi) materially amend or change any of the Company’s accounting policies or procedures, other than reasonable and usual amendments in the ordinary course of business or as may be required by a change in GAAP;
(xii) make, change or revoke any material Tax election, amend any income or other material Tax Return, settle or compromise any material income Tax liability, adopt or change any accounting method in respect of material Taxes, consent to any extension or waiver of the statute of limitations applicable to any claim or assessment in respect of material Taxes, execute any material “closing agreement” as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or non-U.S. income Tax Law) or enter into any Tax sharing or similar agreement in respect of material Taxes (other than, in each case, an Ordinary Commercial Agreement);
(xiii) materially amend, or modify or consent to the termination (excluding any expiration in accordance with its terms) of any Material Contract or amend, waive, modify or consent to the termination (excluding any expiration in accordance with its terms) of the Company’s material rights thereunder, in each case in a manner that is adverse to the Company, taken as a whole, except in the ordinary course of business;
(xiiixiv) fail to use reasonable efforts to prosecute, protect, enforce and maintain, material Company IP;
(xivxv) (Ax) acquire, license, sublicense, waive, covenant not to assert, pledge, sell, transfer, assign or otherwise dispose of, divest or spin-off, any material item of Company IP or other Intellectual Property used or held for use in the business of the Company, (By) abandon, relinquish, permit to lapse or to be abandoned, invalidated, dedicated to the public, or disclaimed, or otherwise become unenforceable or fail to perform or make any applicable filings, recordings or other similar actions or filings, or fail to pay all required fees and Taxes required or advisable to maintain and protect its interest in, each and every material item of Company IP or other Intellectual Property used or held for use in the business of the Company or (Cz) disclose or otherwise make available to any person who is not subject to a written agreement to maintain the confidentiality of such trade secrets any material Trade Secret included in the Company IP or other Intellectual Property used or held for use in the business of the Company;
(xvxvi) waive, release, assign, settle or compromise any Action, other than waivers, releases, assignments, settlements or compromises that are solely monetary in nature and do not exceed $100,000 individually or $1,000,000 in the aggregate; or
(xvixvii) enter into any formal or informal agreement or otherwise make a binding commitment to do any of the foregoing. Notwithstanding the foregoing, the Company shall not be prohibited from taking any of the foregoing actions to the extent that any of the foregoing are required by the existing terms of any of Company Securities presently outstanding, in which case, the Company may take such actions as are required to fulfill its obligations under such Company Securities. Nothing herein shall require the Company to obtain consent from Parent to do any of the foregoing if obtaining such consent might reasonably be expected to violate applicable Law, and nothing contained in this Section 6.1 6.01 shall give to Parent, directly or indirectly, the right to control or direct the ordinary course of business operations of the Company prior to the Closing Date. During the Interim Period, each of Parent and the Company shall exercise, consistent with the terms and conditions hereof, complete control and supervision of its respective operations.
Appears in 1 contract
Samples: Merger Agreement (FG Merger Corp.)
